10 International Journal of Academic Research in Accounting, Finance and Management Sciences Vol. 9, No.3, July 2019, pp. 10–16 E-ISSN: 2225-8329, P-ISSN: 2308-0337 © 2019 HRMARS www.hrmars.com To cite this article: Kusumaningrum, T. M., Isbanah, Y., Paramita, R. A. S. (2019). Factors Affecting Investment Decisions: Studies on Young Investors, International Journal of Academic Research in Accounting, Finance and Management Sciences 9 (3): 10-16 http://dx.doi.org/10.6007/IJARAFMS/v9-i3/6321 (DOI: 10.6007/IJARAFMS/v9-i3/6321) Factors Affecting Investment Decisions: Studies on Young Investors Trias Madanika Kusumaningrum, Yuyun Isbanah, R. A. Sista Paramita Management Department, Universitas Negeri Surabaya, Indonesia, E-mail: triaskusumaningrum@unesa.ac.id Abstract This study aims to examine the factors that influence investment decisions. This study uses financial literacy and investment experience variables as independent variables, risk tolerance as an intervening variable and investment decisions as the dependent variable. This research is a quantitative study using primary data, with data collection techniques using questionnaires. The population in this study was novice investors in the Economic faculty. Data were analyzed using partial least square analysis. This research is expected to provide benefits to investors for investment decision making. Key words Financial literacy, investment experience, risk tolerance, investment decisions Received: 25 Aug 2019 © The Authors 2019 Revised: 04 Sep 2019 Published by Human Resource Management Academic Research Society (www.hrmars.com) This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode Accepted: 08 Sep 2019 Published Online: 17 Sep 2019 1. Introduction Investment is a number of funds issued in the hope of gaining profits in the future. Investment according to the time dimension is divided into two, namely long-term investments with instruments on real assets such as land, buildings, office equipment, vehicles, investments in stocks and bonds. While short-term investments are investments in current assets such as cash, accounts receivable, inventory, and securities. Before investors decide to invest in short-term or long-term investments, there are certain considerations that underlie that decision. Investment decision making is often influenced by intuitive thoughts or emotions rather than logic. Using cognitive perception taken through shortcuts, and only determined by themselves, they will act under the influence of various psychological factors (Sönmez, 2010). Based on data from the PT Kustodian Sentral Efek Indonesia (KSEI) (2017), it is noted that the number of Single Investor Identification (SID) investors broke the 1,000,000 figure in 2017, while in 2016 it was 891,070. the increase in the number of SIDs indicates that the interest of the local community in investing in the capital market, especially stock transactions has increased. In relation to investment decisions, related theories are the behavioral finance theory. Shefrin (2000) defines behavior finance as a study that studies how psychological phenomena influence the financial behavior of stock players (practitioners) and how humans actually behave in a financial setting (Nofsinger, 2001). Tanvir et al. (2016) mention in their study that in behavior finances contexts, especially emotion and perception can affect decision making from different perspectives. They found out that emotion intelligence has significance impact on investment decisions and plays a vital role in selection of securities decisions of investments. Investment decisions are closely related to financial management decisions. Financial management is part of financial literacy. Creating financial literacy intervention is an obvious and a common-sense response to the increased complexity of the financial world. Financial literacy is an important issue at all